The life and times of an Arizona Investor

This will be my personal journal to document my failures and successes during my real estate experiences in Arizona. All stories, thoughts, and successes will be documented..

Thursday, June 30, 2005

Arizona doesn't like bandit signs anymore ;-(

Well, for the last 3 months, I've had my sign guy placing bandit signs out in more numbers and larger farming areas than ever before. The results? Not nearly enough leads!

I must have over 200 out at any one time.. The calls coming in are low. If I depended on my bandit signs to pull leads , I would have ran out of food months ago! Its strange because last year was so much better. I had more leads coming in from 1/4 of the signs. Kinda of depressing.

I was telling one of my fellow bloggers that to buy a piece of real estate you should look at 100 properties, make offers on 10, and buy one. Its a numbers game. There's one deal that I could have done a couple of months ago, but decided not to (mistake). So, that could have been my property for 1st half of 2005. Hopefully not.

I wish I could be writing blog entries on my experiences handling properties, but its not happening right now. Thats ok.

I've been at this couple of years now and I've learned a lot. I know that a lot of people would leave this business right now (or months ago) because its too hard in this type of market. After listening to Kiyosaki's tapes, my tough luck has been "good" experience being successful in the future.

I'm in friendly competition with my buddy Stuart who has bought several properties this year. He finds a property (MLS) that he can build on and always pays over the asking price because of competition. So, if he can find enough properties that fit his parameters, he picks them up. After building, he still makes plenty of money in the project. I heard him say twice now that the market is kicking my ass which I don't like to hear.

I am going to add this strategy to my marketing. I will find a good lead and bring it to Stuart to see if I could use his team or be partners.

Overall, its still too early to kill my marketing plan. I have alot of new things already started (letters to vacants, business card distribution, more signsetc.), so sometimes it takes months to get calls coming in. I'll be waiting..

Good investing!

P.S. Since I got the home improvement bug, I'm going to put in saltillo tile in the bathrooms to my house this weekend.
|| Bginvestor, 10:55 AM || link || (0) comments |

Tuesday, June 28, 2005

Offer #8 Rejected..

I missed the barrio house. The seller got his full asking price of 79k. What was interesting about this one was he got HOMEVESTORS to buy this property. These guys spend over 30k in marketing a month. It really surprised me that these guys jumped at the chance to buy this one.

They must be really hungry right now!

Oh well, this house was the most trashed house I've ever seen. I'm almost glad I didn't get it. 80% of the dry wall would need to be replaced.. Just awful...
|| Bginvestor, 12:33 PM || link || (4) comments |

Marching ahead...

I've been listening to Kiyosaki's audio tapes.. Wow! Great stuff. Many years ago, I read his rich dad, poor dad book and honestly didn't get much out of it. I think it was because his common sense principles didn't sink in.

After watching a buddy go through his tapes and almost made a millionion dollars in 3 years , I took his material much more seriously.

My mind is changing on how I look at things. I'll write more about that later.

Anyway, I've been so busy w/ REI that I haven't had a chance to write much. My marketing plan has changed and the goals that I've set is coming into reality.

I've now sent letters to many vacant properties that were gathered by my sign guy and my birddog. I plan to send multiple letters for maximum results.

For preforeclosures, I've got to the point where I've sent three letters to homeowners. Unfortunately, I've had little success. At first, I got two calls when I switched letters so I thought I was on to something, however, I'm less confident now. I need to test the waters for several more months, but I don't think sending letters is an effective marketing method right now. Door knocking is hands down the best, however, finding time is difficult and I can't do it every week.

Overall, I'm still having the same old problem. Not enough calls, to look at enough properties to make offers..

The general rule is to look at 100 properties, make offers on 10, and buy one. For motivated sellers, I would say I would cut the 100 number in half. Right now, I'm getting 20-25 calls off of some marketing. This suggests that I should be picking up a property here pretty soon.

I would like to receive 100 calls per month, but I would have to spend over 1k a month in marketing to obtain those results.

Good investing
|| Bginvestor, 12:16 PM || link || (1) comments |

Thursday, June 23, 2005

Offer #8 House in the barrio..

I was talking to one of my brokers yesterday and he told me , "You know when the market is in a real estate bubble when you have investors fishing in trouble neighborhoods to fix them up and sell at high prices!"

This was funny because I was going to one of these properties when I was on the phone with him!!! lol.. Bottomline, if the numbers work, your risk is low.

I brought one of my buddies over to this one because it has a large lot and you may be able to build another house! After talking numbers, it would be tight because to build a 1080 sqft house is about 80k, and we probably couldn't sell it for over 100k because of the area. He does this in the nice areas and make tons of cash.

The rehab on the existing house is simply amazing. I estimate you have to replace 80% of the drywall, and you can't keep anything in the house. Everything has to go!

The guy offering this is trying to wholesale, and got it from door knocking from a preforeclosure list. Umm... That's what I do!

Anyway, he's asking for 80k, if I can buy it for 65k, the numbers work.

Do I have a chance? We'll see.
|| Bginvestor, 7:03 AM || link || (1) comments |

Wednesday, June 22, 2005

Offer #6 was rejected..

I offered 70k and some other investor bought it "as is" for cash for 100k! I thought comps were 115-120k

Crazy market..
|| Bginvestor, 5:50 PM || link || (3) comments |

Sunday, June 19, 2005

Offer #7 - I thought this was a 9!

So, I went door knocking yesterday to scrap up some more leads. The first one was a nice guy that was receptive to my pitch. It was a nice house. I got his number and told him that I would call him in a week or so if he couldn't work anything out with the banks.

I was surprise at my second door knock, when I said, "Is there anything I can do to help." She said, "yeah, you can buy my house!" Awesome..

She let me in immediately (great sign) and this was her story. She was behind in 4 months worth of payments, and she just wants out! This is a good neighborhood and her house was in good condition.

So when I asked her, how much she needs, she said, " I need my investment back. I need 18k"

Hmmm.. I told her I probably wouldn't be able to get her that, and showed her the numbers if she sold w/ an agent. Its difficult to get all your money back when you bought it a year ago. She immediately asked me what I could offer and I told her I need to confirm some comps and I will talk to her the next day.

So, I went home to do some DD, and saw her this morning. Before I started, I asked, " If you like my deal, are you ready to sign the paperwork today. " Yes, she said. Good, so I gave her my pitch to show her again that if she sold through an agent she would need money to bring to closing. And she needs to sell the house no later than a month from now before she will be at high risk to lose the house. I told her that I will buy it "as is" and give her moving money. When I told her I could give her jsut $1500 cash for her equity, she immediately said, "No!" and just put her head down shaking and saying , I can't do this!! I need 18k. This blew me away as much as her reaction to my offer to her. Obviously, showing her that she would lose money selling it conventionally did not sink in. Here's the numbers..

ARV: 130-140k
"As is" value: 125-130k
Owes: 108
Arrears: 5k
Offer: 108+5k+closing costs.

I want to leverages off of the current market conditions, so if I bought it, I would lease option it and make over 20k in one year or 32k in two years.

She's kind of in denial.. If she works fast and does it right, she could sell it on her own and make more than I could give her, but its risky because of her situation. No where close to the 18k though... If the buyer backs out at the last minute, she will lose the house..

Anyway, I talked to her about for an additional 20 minutes to bring out some more motivation, but she was not interested. Even telling her that if I bought subto I could give her more money, she was not interested because it was so far from her expectations. So, I wished her luck and told her I hope it all works out for her. She mentioned she could get a loan from her son so thats probably her ace card.

I thought she was a 9 on motivation, but she still wanted retail so I guess I was wrong. After that, I took the rest of the weekend off and saw a movie w/ my wife.

Good investing!
|| Bginvestor, 11:43 AM || link || (6) comments |

Saturday, June 18, 2005 great deal on business cards..

I just received my business cards from vista print in just a week using standard shipping. The quality is great! I bought 2500 cards for just over $100. Great price for using gloss, double sided, etc..

The print is below.. I downloaded their photoshop template and made my own design and uploaded it as a picture. Worked great!

I gave these to my distributor this morning, so we'll see what happens.

I don't have enough leads coming in , so I'll be in 100 degree weather today doing some door knocking!

Good investing,

|| Bginvestor, 11:04 AM || link || (0) comments |

Friday, June 17, 2005

Offer #6 Motivated Seller..

I met the owner last night and checked out the property. Its exactly what I'm looking for. The curb appeal is awesome. I will definitely be able to make some good money on it.

It's almost a full rehab, walls, kitchen, flooring.. The roof is good!

There's so much junk at this house!!! The shed in this picture is crammed with junk. Its a two bedroom house and the rooms are so packed that you can't even walk into them. Seriously!

The back yeard is big and has a lot of junk as well. There's so much junk that its needs to be taken into consideration in the offer price.

The guy tricked me, after we talked about what the house should sell for, he told me that he would not sign anything tonight, and he will be talking to other investors.. Arghh!

He's motivated, but he doesn't need to sell right now. It appears he will shop around a little bit and to determine the price by the offers coming in.

I'm nervous because there's a lot of anxious/unsavvy investors that will purchase a major fixup for over 80 cents on the dollar in this type of market.

Basically, I'm at 70 cents with him right now. This is my upper limit we'll see.

After I told me about the coming offers, I summarized my offer..

  1. I'm easy to work with it.
  2. I'll buy it "as is"
  3. I'll take the junk away
  4. I'll pay in cash

He left town, and will be coming back next Friday. We'll see if we can put some ink on the paper.

I wish I could look at ten of these types of houses a month..

.. Posted by Hello
|| Bginvestor, 5:49 AM || link || (0) comments |

Posted by Hello
|| Bginvestor, 5:48 AM || link || (0) comments |

Posted by Hello
|| Bginvestor, 5:48 AM || link || (5) comments |

Wednesday, June 15, 2005

The importance of understanding market cycles..

Let's talk market cycles... The gurus at the seminar was breaking it down into three categories.

  1. Expansion Phase (3 to 5 years)- This the very beginning of a boom market. Its early in the phase , so most of the investors do not understand the potential opportunities. This when the money is really made and the savvy investors make their bets. The best way to track this type of market is to be on top of the market data and be able to extrapolate trends.
  2. Absorption Phase (4 to 7 years)- The "cat is out of the bag" This phase is when everybody is jumping in to get a piece of the Real Estate action. The builders are selling like crazy, everybody is talking about the growth opportunities.
  3. Contraction Phase - Market begins to shrink and happens very quickly. This phase will stay the same UNTIL something significant happens to bring it out. i.e., IBM comes to town for employment..

The gurus think that Phoenix is a couple of years into the absorption phase. Is there still money to be made? Absolutely! You just have to be careful and make sure the numbers work.

Its important to ask yourself the following questions:

  1. What cycle am I in?
  2. What's the best ways to make $$ in my market?
  3. How can I protect myself from contraction?

Good investing!

|| Bginvestor, 12:18 PM || link || (3) comments |

Tuesday, June 14, 2005

The birddog found some leads.. ;-)

I had a guy call me a couple of weeks ago and expressed interest working as a birddog. We lost touch for a week or so, but yesterday he gave me a lead.

The seller acted like he was motivated, but he's not really motivated. He's selling for retail..

He had a new home built and lost his job, however, he's confident in selling the house before he can't make the payments.

I expressed interest in a subto deal and he said he would not entertain a deal like that right now, however, he'll call me if he gets into trouble!

This guy likes to gamble, but he was a straight shooter and acted professional which I liked..

Good investing!
|| Bginvestor, 5:51 PM || link || (0) comments |

Monday, June 13, 2005

Want to read a real MOTIVATED lead. Check this out!

Here it is.. This lead was pulled from my signs.....

The guy lives in South Lake Tahoe, NV and has a small house in Tucson that he wants to sell quickly. He's been rented it to a "relative" for several years. He hasn't received rent since January and has to evict the guy! He's doing this right now..

He said, "He wants to sell the house right now and just get rid of it!"

Now this is the type of leads I'm looking for. Ten of these leads and I should be able to buy at least 3-4 houses.

After the guy is evicted, he'll show me the house. Wish me luck on this one!

Stay tuned!
|| Bginvestor, 4:51 PM || link || (3) comments |

Sunday, June 12, 2005

Mobile lead is 6 feet under..

I talked with the lady who owns the mobile home and she won't go any lower than $3500. After looking at it, I wouldn't buy for it for over $1000. Its in a 55+ community so I may not be able to sell until next snow bird season.

Oh well.. I left my card and told her to give me a call when her situation changes..

Good investing!
|| Bginvestor, 4:47 PM || link || (0) comments |

Saturday, June 11, 2005

Here's my new business card..

As part of my new marketing plan, I've found a local business card distributor that will pass out my cards to over 50 locations every month for $28!. Not bad. He's got some great locations and this could be real promising.

If your big into marketing, I recommend exploring this avenue..

Below is my new business card that I've designed for this purpose.

Good investing!

. Posted by Hello
|| Bginvestor, 5:17 PM || link || (0) comments |

Monday, June 06, 2005

Mobile home lead just came in..

Property: Single wide
Type of park: 55+
Monthly lot: $359 (no elec or phone)
Wants to sell for $4k
Motivation: Wants to move out of state immediately
Background: She had it as a rental for 10 years. Currently vacant.

Is this a deal? Not sure, I am doing some research and asking a mobile investor for some advice. I'm thinking of paying her 2k and calling it a day. Although the winter birds have gone, and the monthly lot rent is high.

cs Posted by Hello
|| Bginvestor, 7:54 PM || link || (0) comments |

Should Newbies go straight to 5k to 20k seminars!?

You guys missed a great seminar that was held in Phoenix, AZ last weekend. Gerald Romine was hosting and had several speakers including Todd Dotson, Mr. Lowry, Jeff Kaller, Gerald R., Scott Scaul, and others.

You guys must think I am a seminar junky , but the fact is the more knowledge you have , the more money you'll make, because you'll make less mistakes and make more money.

This was not a bootcamp, but a lost cost seminar ($97) that hooks people into buying speaker's products. I highly recommend newbies to go to these types of seminars because it illustrates many types of investing and can give you ideas where you want to start.

At the same time, I have mixed feelings. You see, if you bought every course that was available during the 3-day seminar, you would have spent $50,000 dollars in education!!!! No shit, I was counting... Did I spend this or any course, the answer is no.

I took notes like a mad man, and I learned a lot. The biggest points that I learned was , if I buy a 50 unit apartment building, or a 60k condo, its really same...

My favorite quote from the whole seminar was, "If you think in pennies, you'll make pennies, if you think in dollars, you'll make dollars" Holy crap that is cool.. When Donald Trum says, " Think big". This is exactly what he means guys and gals..

I found several gold nuggets that I will work in the next couple of weeks. Here's my list.

  1. Generate a transcript that I will listen too almost on a daily basis. This includes, my goals, how I feel about my relationship to my wife, and how I am going to prosper. This may seem silly to some. But your subconscious drives most of you decisions. You need to create a habit to make sure your conscious will allow you to reach your goals. Basically, this will help me get "into the zone" for buying real estate.
  2. Generate a weekly goal sheet and track the progress. They showed the format and how to do this effectively.
  3. Forgot about the power of wholesaling! This will be implemented into my exit strategies.
  4. Include driving the neighborhoods for wholesale opportunities (run down/boarded houses)
  5. Email investor that took Scott's course.. Ask him if he would like to trade some of my courses, for his commercial analyzer and legal documents
  6. Send website to guy who asked for bandit sign prices..
  7. "WE BUY HOUSES" message is getting old, being different may help marketing. Stop foreclsoure, etc...
  8. New ideas for direct mail, instead of sending plain jane letters, use lumpy mail, or include simulated lotery tickets, etc...

There's about ten more things I have written down that I can't remember.

Since this is a blog, I would like to help investors decide if they should take a REI bootcamp.

If the investor asked me, " Brian, what is th fastest way for me to start my investing career and get into this business" I will have to say , go to a bootcamp and learn.

Here's another key, if you find a company that offers mentor services, look into that seriously because they will make sure you do deals!

Here's the two negatives of my advice:

  1. You may go to a bootcamp that teaches a certain technique that isn't the best for your market! What if short sales is the thing to do, but you spent 5k on wholsaling. what are you going to do now?
  2. The reality is many, of you will come back and never do a deal, so you wasted $5000 dollars. That would be sad.

I talked with a guy that lives in Tucson that will be moving to Vegas to become a full time investor. He has been a successful business owner in another industry. He told me that he will be taking 9 bootcamps this year. He was bragging, "I'll be taking 90k worth of courses this year"

Damn, I was thinking, well good luck, you'll probably not use 80% of what you learned.

If you spend 5k, make damn sure your going to work your ass off, because the odds are against you to making any money.

|| Bginvestor, 11:43 AM || link || (2) comments |

Saturday, June 04, 2005

Hey, I have an idea..

Happy 4th of July everybody!

As everybody knows, Arizona is in a hot market right now.

It just occurred to me that rent rates are low because everybody is buying a house and does not want to rent. For the last couple of years, if you had a pulse, you could buy a house. With interest rates going up, there will be a point where buyers can't afford a house and will choose to rent.

Investing in apartments right now is a great idea, because the value of apartment buildings are always valued at the rental comps. If the rental comps are low, the value of the apartment building have to be low. I think I'll be looking into this right now. :-)

I already did an analysis on one property in a low income neighborhood. This particular property is selling for top price, but he is offering owner financing, so if terms are reasonable, than maybe I can work some thing out.

Good investing.
|| Bginvestor, 12:10 PM || link || (0) comments |
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